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Tuesday, April 1, 2008

Would you like a helicopter or minisub to go with that megayacht? - International Herald Tribune

Would you like a helicopter or minisub to go with that megayacht?
By John Tagliabue
Monday, October 1, 2007

MONACO: Massimo Vilardi, an executive with Eurocopter, came to this year's Monaco yacht show to sell helicopters.

Helicopters? At a boat show?

Yacht sales have increased 10 percent to 15 percent a year in the last few years, and this year was no exception. Since everyone who is anyone has to have a yacht, and increasingly does, what buyers want most now, naturally, are accessories: minisubmarines and helicopters.

Olivier Milliex, head of yacht finance at the Dutch bank ING, summed it up best. "Today, a mega-yacht is indispensable," he said. "It's not like 15 years ago, when a yacht was a luxury item."

Stock markets may be in rough seas and oil prices exploding, but none of that put much of a blemish on the mood at the trade fair last month in Monaco. Europeans often watch boat fairs like the canary in the coal mine to judge the overall health of their economies. But Monaco may not be the best bellwether: if other boating fairs are prêt-a-porter, Monaco is, by design, haute couture.

The annual boating trade fair, hardly the largest in a series of fairs that go from Cannes to Genoa to Fort Lauderdale, Florida, at the end of October, ran here from Sept. 19 to Sept. 22. Monaco limits the number of exhibitors to about 500; moreover, many yacht builders do not even show yachts. Their customers do not want off-the-rack yachts, they want boats custom-built to designs that will not be replicated.

One bauble that increasing numbers of big yacht buyers are asking for is a helicopter. Of course, that means adding a pilot and a mechanic to the yacht's crew, but for the people who buy these yachts, that is hardly a concern. So Vilardi, head of marketing in the business and private market segment of Eurocopter, a unit of the EADS aerospace group, has linked up with the British yacht broker Edmiston to meet their wishes. At Monaco this year, Edmiston showed a 60-meter, or 200-foot yacht with Eurocopter's smallest helicopter, which sells for about $2 million, perched atop.

"Our motto is, 'To create what money can't buy,' " Vilardi said. "You're looking at a global offer: a car, a yacht, a helicopter, maybe a plane." And, maybe, a submarine?

Across the fair from Edmiston, the Dutch company U-Boat Worx was showing its colorful two-seater submarine, whose bulbous shape makes it look like Mickey and Minnie Mouse would drive it, with a list price of $246,000. The minisub, said Erik Hasselman, U-Boat Worx's head of sales and marketing, is ideal for stowing on a yacht, but for safety reasons can only dive to about 50 meters, where there is still surface light. "It's only for recreation," he said.

The banks at the trade fair, said Milliex of ING, were doing cross-selling: offering tax and finance advice to the same people who they serve as private banking clients.

Some wealthy customers, for example, prefer a mortgage for their yacht, taking advantage of low interest rates, rather than tying up cash in a yacht purchase. Others need advice on creating a company to buy their yacht, rather than purchase it directly, to save on taxes, or on registering their boat in a foreign country to enable them to pay lower social security contributions for crew members. Many of the yachts parked in Monaco were registered in George Town, in the Cayman Islands.

"Anyone who is in the oil business, naturally, is going to be motivated to build a yacht," said Hans-Erik Henze, senior vice president for yachts of Germany's Blohm & Voss, a division of the ThyssenKrupp steel group. "And that's where we do a lot of our business."

Blohm & Voss had the largest yacht at the show, the 105-meter Lady Moura, but it was moored offshore, not for visiting, being too large to fit Monaco's narrow harbor. Henze said the company's three yards had 15 yachts under construction. "Once, 100 meters was thought big," he said. Now we have several projects above that."

Despite the ostentation of Monaco's yacht shoppers, some bargain hunters come here, and they, in turn, are attracting shipbuilders from low cost countries. One of those was Timmerman Yachts, a Russian-Polish enterprise with yards in Moscow that is named for the Dutchman who introduced Czar Peter the Great to the art of shipbuilding. The yards build yachts in five sizes, from 25 to 47 meters, and there are 12

Asked why someone in Monaco would buy a Russian yacht, Irina Bogatyreva, a company official, replied unabashedly: "The price is cheaper, and the quality is the same as in other countries."

Curiously, some of the world's biggest yachts are owned by Russians. Roman Abramovich, the Russian tycoon, owns at least three, and has another under construction, the 165-meter Eclipse, which according to Monaco newspapers, will be outfitted with twin helicopter landing pads, and a submarine.

The high price of oil, which yachts burn as fuel, did not seem to worry anyone.

"I would say this market can withstand a lot of fluctuations, as the economy worsens," said Diane Byrd, executive editor of Power & Motor-yacht, the trade publication. "It's a small group of owners, a handful of people, and it's still growing."

Nor did the anemic U.S. dollar appear to be having much influence on the flow of orders. Westport Yachts, which showed a 50-meter, $29 million yacht, said that of five 35-meter yachts it would build next year, all were sold, and of five 40-meter yachts, three were sold.

What did seem to be creeping into the business is an awareness of the environment. In a narrow stand, Lance Sheppard hawked a foam and fiberglass product that replicates wood, like teak, hence sparing the forests.

"These days it's hard to get all types of veneers," said Sheppard, marketing director of Digital Veneer, a unit of the SMI Group, of Whangarei, New Zealand. "A lot of teak is illegally lumbered, some by the Chinese, in Burma and Nepal."

But the boat that dripped green, in spirit if not color, was a 50-meter yacht built by the Italian yard Mondo Marine. Renato Polo, a company official, listed the yacht's environmental assets: devices to recuperate its used water, filters on its twin diesel engines to capture particles, a hull covering that is benign to its marine environment, filtered glass to diminish the heat on board and hence reduce the need for air conditioning.

The $34 million yacht was built for Luciano Benetton, of the clothing chain whose ads always promoted social causes, for instance, against poverty or for education, and Benetton named it Tribu, Italian for Tribe, for his large family. Benetton gave the yacht five spacious bedrooms, each with its own bath, plus two exercise rooms and a sauna. Asked how much the environmental features would add to the bill for such a boat, Polo replied, "On a boat of this size, the difference in cost is laughable."

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